GameStop Rallies on 1Q Beat, Console Sales

GameStop (GME) topped Wall Street expectations with first-quarter earnings that grew 25%, as demand for new videogame consoles from Microsoft (MSFT) and Sony (SNE) continued to pick up.

The retailer also provided a forecast for earnings of 12 cents to 20 cents a share in the second quarter, bookending the consensus estimate of 17 cents.

Shares rallied 4.7% to $38.62 on Friday morning. GameStop is still down 21.5% since the start of the year.

GameStop has benefited from the November launch of Microsoft’s Xbox One and Sony’s PlayStation 4. However, videogame sales remain tepid, and the Grapevine, Texas-based company has focused more on game downloads and mobile offerings.

“The next-gen console business is meeting our targets, our digital properties continue to grow and our new tech brands segment is positively contributing to our profitability,” CEO Paul Raines said in a statement.